A bonus in sales compensation is a one-time payment given for achieving specific goals, milestones, or performance thresholds. Unlike commission, which is calculated as a percentage of each sale, bonuses are typically fixed amounts triggered when certain criteria are met. According to WorldatWork (2024), 78% of company commission plans include at least one bonus component.
| Bonus Type | Description | Example |
|---|---|---|
| Quota bonus | Achievement of sales target | $3,500 at 100% quota |
| Quarterly/annual | Period-based bonus | $7,500 annual performance bonus |
| Milestone bonus | First deal, largest deal, etc. | $750 for first closed deal |
| SPIF | Short-term incentive for specific goal | $350 per new logo this month |
| Team bonus | Collective goal achieved | $1,500 if team hits 110% |
| Strategic bonus | Priority customers or products | $2,250 for enterprise logo |
Bonuses supplement commission structures in ways commission can't:
According to Salesforce State of Sales (2024), reps with bonus targets are 29% more likely to exceed their quota compared to those with commission-only plans.
Bonus based on annual performance:
| Attainment | Bonus |
|---|---|
| 100% of quota | $3,500 |
| 110% of quota | $7,500 |
| 125% of quota | $15,000 |
| 150%+ of quota | $26,000 |
Rep with $150,000 quarterly quota:
| Quarter | Attainment | Bonus |
|---|---|---|
| Q1 | 95% | $0 |
| Q2 | 105% | $2,250 |
| Q3 | 112% | $3,750 |
| Q4 | 98% | $0 |
| Annual total | - | $6,000 |
| Aspect | Bonus | Commission |
|---|---|---|
| Calculation | Fixed amount or tiers | Percentage of sales |
| Trigger | Threshold/goal achievement | Each completed sale |
| Frequency | Often quarterly/annually | Typically per deal/monthly |
| Predictability | Known amounts | Varies with deal size |
| Best for | Goal achievement | Revenue generation |
Make goals clear and achievable: Reps need to know exactly what they need to do to earn the bonus. Unclear or unrealistic targets demotivate.
Timing matters: Quarterly bonuses maintain motivation throughout the year. Annual-only bonuses risk reps giving up mid-year if targets seem unreachable.
Balance individual and team: Individual bonuses drive personal accountability. Team bonuses promote collaboration. Effective plans include both.
Pay quickly: Pay bonuses as soon as criteria are met. Delayed payment weakens the connection between performance and reward. According to Xactly (2024), motivation drops 23% for every month bonus payment is delayed.
SPIF (Sales Performance Incentive Fund) is a type of bonus, but typically short-term (weeks to a month) and targeted at specific behavior. Standard bonuses are often quarterly or annual and tied to overall goals.
Use bonuses when you want to reward specific thresholds (not just more sales), drive non-revenue behavior, create team incentives, or provide predictable reward amounts.
Limit to 2-3 core bonuses. Too many bonuses dilute focus and confuse reps. Each bonus should have a clear purpose and be easy to understand.
Bonuses are a powerful tool for driving specific behavior and recognizing milestones. But they only work if reps can see their progress toward goals and trust that the bonus pays out when criteria are met.
With Prowi, you can set up and track bonus criteria in real time, so reps always know how close they are to the next milestone—and you know exactly what bonus payouts will be.